THE beleagured carmaking industry has been thrown a lifeline after Chancellor Alistair Darling admitted he was considering a request for a financial bail-out.

THE beleagured carmaking industry has been thrown a lifeline after Chancellor Alistair Darling admitted he was considering a request for a financial bail-out.

The Society of Motor Manufacturers (SMMT) has asked the government to make loans available to car manufacturers to compensate for the refusal of banks to offer short-term credit.

Jaguar Land Rover, which employs 17,000 in Birmingham, Solihull and Liverpool, is believed to be among manufacturers asking for credit.

The SMMT asked the government to consider making credit available when representatives met business secretary Lord Mandelson late last month. Jaguar will not comment on reports it has asked for loans, but points out it is represented by the SMMT.

If credit was available, it would help businesses deal with cashflow problems which would be dealt with by bank loans in normal circumstances.

Speaking in Westminster, Mr Darling said the government was prepared to consider requests for help, but warned there were important differences between helping the manufacturing sector and supporting banks, which have benefitted from a £500billion rescue plan.

He said: “There is a distinction between the banking system and general support.”

It had been necessary to support the banking system because it is “central to everything we do”, Mr Darling said.

Asked if he would support carmakers, he said: “In relation to companies in general, through mostly the Department of Business and Enterprise, and also other arms of government, we do offer support for investment. In relation to other requests, we will judge them on their merits. But the main support we can give is the support we give the economy generally. Cutting VAT affects the price of cars, for example.”

Tory leader David Cameron yesterday met Andrew McCall, government affairs director with Jaguar Land Rover, and senior figures from Toyota and Airbus, as well as Staffordshire-based JCB.